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Trade Secrets Directive to be published this summer

Passage of the draft Directive on Trade Secrets (the ‘Directive’), proposed in November 2013, looks imminent. We’re expecting that the final Directive will be published this summer, giving each of the 28 EU Member States two years in which to enact national implementing legislation.

The new Directive aims to harmonise the differing national laws protecting trade secrets from unlawful acquisition, use and disclosure by establishing a common framework of minimum standards.

The Directive explains that an unlawful acquisition of a trade secret will occur if a person acquires a trade secret without the consent of the trade secret holder through unauthorised access, bribery, theft, deception, or by breaching a confidentiality agreement, and/or engages in ‘any other conduct which, under the circumstances, is considered contrary to honest commercial practices’.

The Directive, however, is not designed to hinder the development of trade secrets within organisations, so the acquisition of trade secrets will be lawful if the trade secret is discovered independently or through reverse engineering, or if ‘honest commercial practices’ were applied.

Despite these exceptions, some concerns have been raised within the health industry that the broad definition of trade secrets allows anything within a company to be deemed as such, and therefore gives companies the power to sue anyone using their information. This may make it harder for individuals to find out information in the public interest, and could stifle the development of health care products in particular.

An effective balance needs to be found between protecting the unlawful acquisition of trade secrets and the commercial need to promote innovation and development of trade secrets, with the right to freedom of information and expression.

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